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Financial Stuff Outside the Box

Touch the Soil News #616 (feature photo CC SA 3.0) The cornerstone of the financial system – upon which the economy hinges – is the banking system. In the aftermath of the 2008 financial crisis, the Frank-Dodd Act tried to manage the risks banks take. In the process, banks needed to build more equity. The theory is that if banks have more equity, they will have a greater cushion for adversity before the FDIC has to step in and protect deposits. To make it simple, let’s assume the banking industry is a house worth $100,000. As of 12/31/2008, the banking system would have had debts of $90,700 against the $100,000…

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Who is Right?

Touch the Soil News #569 (Feature photo – Annette Bernhardt CC 2.0) The fight for $15 minimum wage for fast-food workers has recently hit the streets again. For people, good economics is when many people are working at a survivable wage. For example, one businessman once told me that good economics is when 1,000 people farm 10 acres each and all make a living. Bad economics is when one farmer runs 10,000 acres with an army of minimum wage labor. When it comes to finance, it can be the opposite of economics. Good finance can be when 1 person can run a 10,000 acre farm using hundreds of minimum wage…

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What is the Message – From Far Away Bulawayo?

Touch the Soil News #512 Where is Bulawayo? It’s a city of 1.2 million people in Zimbabwe in the deep south of Africa. Bulawayo was historically known as the industrial center of Zimbabwe. However, severe economic contraction has left the industrial sectors of the city vacant and deteriorating. And it’s not that what was produced in Bulawayo is not needed – textiles, engineering, metals, blankets and shoes. Through a combination of financial maneuverings and unhealthy competition – whole cities (even nations) can be left behind. The popular phrase “no person left behind” explains frustrations by Americans about the economic landscape (or lack thereof) leaving people behind. Tthe larger world is…

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Shake Shack – Can We Keep the Fun Going?

Touch the Soil News #463 Shake Shack was born as a food cart inside Madison Square Park in 2004. It was born amidst an environment of people having fun. The enterprise specializes in hotdogs, hamburgers, fries and milk shakes. The restaurants grew in popularity and like other fast growing companies – decided to go public in 2014. New restaurant openings were rapid and the company now has 100 locations – small by Wall Street standards. Going public is not necessarily about having fun – it comes with a responsibility to pay dividends and keep stockholders happy. But that is getting difficult to do. Shake Shack earnings have been dropping the…

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The Ownership Saga Behind Hostess Twinkies

Touch the Soil News #434 The saga of the “Hostess” twinkie rivets through almost 100 years of American food history. It reveals a world of turmoil, bankruptcy, takeovers and financial deal making. One must ask: Are the malfunctions of the industrial food chain a surface expression of an underlying “carnivorous” financial landscape? (Hostess Twinkies is a registered trademark of Hostess Brands) James A Dewar (1897-1985) invented the “Twinkie” in 1931 in Shiller Park, Illinois. He was an employee of the Continental Baking Company. In years past, estimates are that fans of twinkies were buying approximately 500 million twinkies a year (photo courtesy of Oak Park Historical Society). A Condensed Timeline…

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The Food Chain – A Landscape of Power Struggles (Part 2 of 2)

Touch the Soil News #365 While it is not common knowledge, many of the struggles hitting the media headlines over food and food employees are also agitating within corporate structures. It is not uncommon for stockholders to express social justice changes to the board of directors – Tyson Foods not being spared the internal controversy. What is interesting are the types of shareholder proposals that come up in a company like Tyson Foods. Called the “Proxy Statement,” public companies use this document to communicate company issues and items stockholders need to vote on. In the most recent Tyson Foods “2015 Proxy Statement” several shareholder proposals came up. In each of…

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More Voices Against Food Speculation – Good News for Humanity

Touch the Soil News #320 In the throes of the 2008 financial crisis, there was a concurrent food crises unfolding as well. For those that might remember, financial speculators betting on global grain shortages caused prices in the actual market to spike – sending entire nations into food crisis mode. Almost overnight, the number of people starving around the world jumped from around 800 million to 1 billion. The memory of the effects of this artificially contrived human starvation event (from low-consciousness speculators) has been simmering around the globe. Back in early 2014, the European Union agreed to introduce controls to regulate price speculation on basic foodstuffs such as sugar,…

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